UK close to MFTS training contract, but Future Lynx endangered

02 May, 2008

SOURCE: Flight International

BY: Craig Hoyle

London

The UK Ministry of Defence is close to signing a delayed contract for its tri-service Military Flying Training System project, but refuses to comment on speculation that its Future Lynx helicopter programme could be the victim of a major spending review.

The MFTS project was originally to have delivered initial training services in April 2007 under a 25-year private finance initiative deal worth about £6 billion ($11.9 billion), but its launch has been delayed repeatedly over recent months as the MoD continues talks with the Lockheed Martin UK-led Ascent consortium selected in December 2006. The partnership will manage a broad range of requirements, including the replacement or upgrade of the Royal Air Force's Shorts Tucano T1 trainers (below).

"This is a complex procurement and we have been focused on ensuring the preferred bidder will deliver a value-for-money solution," says the MoD's Defence Equipment and Support organisation. "Getting a sound commercial position understood by all parties is essential. Nevertheless, final negotiations are very advanced and a contract award is expected in the coming weeks."

It took over four years to close a similar arrangement with EADS UK-led AirTanker for the MoD's £13 billion Future Strategic Tanker Aircraft deal.

Meanwhile, the MoD has remained quiet after national media reports that suggest its 70-aircraft Future Lynx deal with AgustaWestland could be set for cancellation. "We continue to consider a number of issues in the current planning round [PR08]," it says. "A number of decisions have been taken. These are largely lower-profile, routine reprioritisations but, where necessary, announcements will be made in due course."

An AgustaWestland source says: "We have received no indication that Future Lynx is any more vulnerable than any other programme." The source adds that the project has met all its milestones to date and is on track to perform first flight in late 2009. Suppliers continue to work on the project as normal, with Honeywell/Rolls-Royce joint venture LHTEC delivering the first CTS800-4N turboshaft flight test engine in late April.

If confirmed, any decision to scrap or re-scope the Future Lynx contract - which is to deliver 40 aircraft to the British Army (artists' impression, above) and 30 to the Royal Navy - would put the future of the UK's Defence Industrial Strategy in doubt. The project was the cornerstone of a strategic partnering arrangement between AgustaWestland and the MoD which, in December 2006, sought to guarantee the long-term sustainability of the UK's rotorcraft production and support capabilities.

News that Etihad's partner Air Berlin has followed stablemate Alitalia into a formal restructuring process on top of the Gulf carrier's own exit from holdings in Darwin Airline and, before that, Aer Lingus leaves its European investment strategy in a state of disarray.

Now that Etihad Airways has elected to stop funding Air Berlin, forcing the German carrier to file for assembly, a central question is which parts of the business can continue to operate in the long term.